Nasdaq brings contentious order type to Europe

Nasdaq OMX Europe, an exchange-backed multilateral trading facility, has introduced BLNK, a European version of its controversial US FLASH order type.

BLNK offers participants the ability to divert orders destined for the primary markets onto the Nasdaq OMX Europe order book for up to 25 milliseconds before being routed on to their destination. According to Nasdaq, BLNK will allow clients to take advantage of the platform’s aggressive rebate pricing structure.

Similar order types offered by US trading venues – BATS Exchange’s BOLT order type, Direct Edge’s enhanced liquidity provider (ELP) programme and Nasdaq’s FLASH order type – have recently come up against staunch opposition, mainly from rival exchange group NYSE Euronext. Nasdaq’s FLASH order type is briefly displayed to all of its market participants, while Direct Edge’s ELP programme currently includes 25 liquidity providers.

NYSE has argued that giving first refusal on orders to a select group of market participants creates a two-tiered market, counter to the objectives of Reg NMS, which was designed to ensure best execution for end-clients. BATS’ BOLT order type, introduced on 5 June, was used to execute 84.4 million shares on its first day of trading.